HP, BT to offer integrated IT and telecom services

As part of a US$1.5 billion outsourcing agreement announced today, Hewlett-Packard Co. (HP) and British telecommunications provider BT Group PLC (BT) said they plan to offer customers integrated IT and telecommunications services.

"We see the IT and communications industry coming together," said Carly Fiorina, HP's chairman and CEO, at a news conference in New York. She added that the agreement will allow the two companies to combine offerings and service-level agreements.

Under the seven-year contract, HP will manage BT's midrange and desktop IT infrastructure services within the U.K., including 100,000 desktops. In turn, London-based BT will manage HP's voice and data network and product-support call centers in Europe, the Middle East and Africa.

The contract value is split between the two companies. As part of the deal, 290 BT employees will become HP employees, and 40 HP employees will move to BT. The agreement "becomes operational" on July 1, officials said.

HP already works with U.S. telecommunications providers to provide joint-service proposals, and Fiorina said her company has service agreements with customers "where there is a big communications component of that relationship.

"What's different about this relationship today is it is anchored in a mutual outsourcing of each other's infrastructure," said Fiorina. Both companies "are building together a set of completely integrated services offerings," she said.

"We think that provides to the customers a tremendous amount of benefit in terms of being able to manage an end-to-end service and set of service levels associated with it," said Anne Livermore, executive vice president at HP's technology solutions group.

Ben Verwaayen, BT Group's CEO, said the agreement "is a recognition that our IP networks on a global basis now have the security and reliability that you can drive vital services over (them)."

HP officials said the agreement could have a global reach in terms of the customers who can take advantage of it. But for U.S. companies, the users most likely to be interested in it are multinational firms.

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